Addressing recidivism in the Golden State through Pay for Success

Rashmi Khare November 21, 2017

At the beginning of this month, we launched with our partners the Ventura County Project to Support ReentryThis is the nation’s 20th Pay for Success initiative and the eighth focused on recidivism. Blue Shield of California Foundation, Reinvestment Fund, Nonprofit Finance Fund, and the Whitney Museum of American Art funded the project, which is part of a larger ecosystem within California, with state and local foundations providing important support to governments as they drive resources to more effective solutions.

Across the state of California, approximately one of every 100 adults is on probation and more than two-thirds of probationers return to prison within three years. Recidivism and community supervision generate significant costs for the State of California and Ventura County; in 2014, California counties spent $1.5 billion on probation services. We know that recidivism also imposes significant costs on the community, victims, families, schools, hospitals, businesses, and public entities.

Against this backdrop, the California Legislature passed Assembly Bill 1837, authorizing the state’s Board of State and Community Corrections (BSCC) to administer $5 million in grant money to counties for Pay for Success. Counties were required to match the BSCC grant money, and had to use at least 90% of it towards outcome payments. It is important to note that the BSCC allowed up to 10% of its grant money to be used towards the county’s administrative costs — an acknowledgement of the development costs the counties bear.

Three counties received funding in 2016 — Los Angeles, Alameda, and Ventura — and each announced project or pilot launches in 2017. In addition to grant funding, BSCC prioritized shared learnings amongst its grantees. While all three projects seek to reduce recidivism in their local communities, each tailors the services to what their residents need most.

In Ventura County, Interface Children & Family Services will serve 400 individuals over four years, with a customized suite of services focused on understanding and responding to each client’s individual needs for successful reentry.

The Ventura County Project to Support Reentry also participated in the California Pay for Success Initiative, a $5.6 million effort to catalyze innovative approaches to paying for improved social services throughout the state. Funded by The James Irvine Foundation and administered by Nonprofit Finance Fund, this initiative provided flexible grant money to over 10 projects, with activities spanning the range of feasibility to transaction structuring, and across a broad range of issue areas. The most recent convening in September 2017 brought together over 70 social sector leaders from across California to celebrate achievements and share learnings from their outcomes-focused projects.

The combination of grants from both the state and philanthropy is powerful — and unique to the Golden State. Through my work as the SFI Director on the Ventura Project, I have seen firsthand how valuable this ecosystem is for Pay for Success, and more broadly, more effective resource allocation.

County governments, all operating underneath the same state laws and policy, get to share concerns, challenges, and innovative solutions that tackle problems that stretch beyond any one county. Service providers can share best practices and identify common needs when working with vulnerable populations.

These connections contribute to the on-the-ground work of each project and add momentum for addressing chronic social issues in a cost-effective, outcomes-driven way. With these kind of strong partners throughout the state, both in government and philanthropy, California is providing a proof of concept that local resources can be directed to scale effective solutions and improved life outcomes for residents.